PREMIER AUTOMOBILES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners are engaged in the manufacture of motor vehicles at their factory at Kalyan. For the manufacture of motor vehicles, the petitioners require steering gears which are used as parts thereof. Some of the steering gears are locally purchased and used by the petitioners in the manufacture of motor vehicles in their factory. During November, 1983-84, the petitioners imported some steering gears. The respondents assessed the steering gears at the rate applicable under Tariff Item 68 of the First Schedule to the Central Excises and Salt Act, 1944 as it stood at the material time for the purpose of levy of additional duty/countervailing duty. According to the petitioners, no countervailing duty is leviable on the imported gears under section 3 of the Customs Tariff Act, 1975 in view of Notification No. 167/79-CE which exempts parts of motor vehicles falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act and intended to be used in the further manufacture of excisable goods either in the factory in which they are manufactured or in any other factory from the whole of the duty leviable thereon. The only condition imposed by the said notification is that the exemption contained therein would be subject to observance of the procedure set out in Chapter X of the rules. The petitioners claimed refund of duty paid by them under mistake of law. The applications of the petitioners for refund were, however, rejected by the Assistant Collector of Customs by orders dated 8-2-1985, 4-3-1985, 3-7-1985 and 9-8-1985. In the first two cases, the claim of refund was rejected on the ground that it was time barred under section 27 (1) of the Customs Act, 1962. In the third case the claim was rejected on the ground of failure to observe the procedure set out in Chapter X of the Excise Rules.

(2.) THE above three orders have been challenged in this writ petition on the ground that the limitation under section 27 (1) of the Customs Act is not applicable to duty paid in ignorance of law and that the observance of the procedure laid down in Chapter X of the Excise Rules is impossible in the case of imported goods and hence the same is not necessary. Reliance is placed on the decision of the Supreme Court in (Thermax Private Ltd. v. Collector of Customs) 1992 (61) E. L. T. 352 and the decision of the Division Bench of this Court in (Maharashtra Vegetable Products Ltd. v. Union of India) 1993 (66) E. L. T. 61.

(3.) WE have carefully considered the contentions of the counsel for the petitioners. We have also perused the above decision of the Supreme Court and the Division Bench decision of this Court. We have also heard learned Counsel for the respondents. We find that provisions of section 27 (1) of the Act are not applicable to claim for refund of duty paid under mistake of law or ignorance of exemption notification issued by the competent authority. In that view of the matter, rejection of claims of the petitioners in the instant case on the ground of limitation cannot be sustained. We, therefore, direct the respondents to consider the claims of the petitioners for refund on merits without raising the question of limitation.